Goring the Bureaucracy

hen President Clinton put Vice President Gore in charge of the National Performance Review last March it was by no means clear that the massive management-reform effort would be taken any more seriously than the dozen or so other efficiency commissions in this century that have already tried to make government work better and cost less.

For months, indeed, the 200-odd members of the review - mostly career civil servants, along with a few consultants and political types -- toiled in near obscurity. Only bureaucrats (who took to calling the review simply "the NPR") and White House aides (who preferred the code name "REGO" -- for "reinventing government") paid much attention.

But in the slow-news doldrums of late summer in Washington, the performance review was transformed.

The process started when pollster Stanley Greenberg told Clinton aides in August that his surveys showed the coveted Ross Perot voters to be intensely interested in government reform. Three-fourths of Perot's followers, Greenberg found, were more likely to vote for a candidate who wanted to radically change government.

Then Clinton himself, eager to appease Democrats in Congress who said his carefully negotiated budget agreement was short on spending cuts, cast the NPR as the next step in the budget-cutting process. It would, be said, reveal untold billions in savings through increased efficiency. While the President headed off to Martha's Vineyard for a vacation, Gore retreated to the Old Executive Office Building to find those savings and whip the review into shape.

On Sept. 7, he emerged with a document he said "is about change -- historic change -- in the way the government works." He can be forgiven a bit of rhetorical excess. The performance review is, by the standards of modern political administration, a stunning achievement. With it, Clinton has done something that few Presidents achieve in four or even eight years: taken a position on almost every major policy regarding the management of the federal government, from setting new accounting standards to completely restructuring the procurement system.

The 168-page report of the performance review, though, is hardly the last word on reinventing government. "We know that this is just the first bite," says its chief author, reinventing government guru and NPR consultant, David Osborne. In fact, as this issue of Government Executive went to press, the performance review staff was still working on a series of follow-up reports to make more specific recommendations. But even those reports will mark only the beginning of what will doubtless be a long battle to convince Congress, interest groups and civil servants that now is the time for sweeping and fundamental changes in the way government operates.

The Blueprint

Bureaucrats, especially at the senior career levels, probably won't be much of an impediment. Most bought into the process early, pleased that Gore was relying on civil servants to conduct the review. They were generally happy with the results, largely because many of the recommendations, notably those for reform of the personnel and procurement systems, have been floating around in the federal ranks for years.

The report makes some very bold proposals. It says, for example, that the Office of Management and Budget will stop using full-time-equivalent employment ceilings, long cursed by agency managers. OMB pledges to concentrate only on budget limits, not the number of employees in an agency. At the same time, the report also takes on sacred cows within agencies by proposing, for instance, to privatize the Federal Aviation Administration.

The NPR's recommendations range from the intricately detailed to the maddeningly vague. One section contains both an arcane proposal to reconstitute the Federal Coordinating Council for Science, Engineering and Technology and the following recommendation: "The President should issue a directive that requires collaborative efforts across the government to empower communities and strengthen families."

The NPR report is, by and large, a bureaucrat-friendly document. It goes out of its way to say that government's systems and its rule-driven culture, not its employees, have caused its problems. "This is perhaps the saddest lesson learned by those who worked on the National Performance Review," says the report. "Yes, innovators exist within the federal government, but many work hard to keep their innovations quiet."

Nevertheless, the report does take some shots at the government's managers and executives. It includes them, along with auditors, personnelists, budget examiners and procurement officials in a group of 700,000 people (fully one-third of the federal workforce) who merely "manage, control, check up on or audit others." It says agencies should follow the lead of the Postal Service, which has declared that any employee who does not touch the mail is overhead and liable to be downsized out of a job.

In one of its much-publicized recommendations, the report pledges to eliminate 252,000 federal jobs, presumably by cutting the managerial and executive ranks. It says the Clinton Administration will increase the ratio of managers to employees from the current 1:7 to 1:15.

In the midst of all that downsizing, though, the report layers some additional short-term burdens on civil servants. Agencies, for example, must review all of their internal regulations over the next three years with an eye toward eliminating half of them. The Office of Personnel Management must review all 10,000 pages of the Federal Personnel Manual and divide its rules and regulations into three categories: those that are essential, those that are useful and those that are unnecessary.

Blame it on the Budget

Where the review goes from here depends largely on whether the Administration can keep it from being viewed as just another effort to make government more efficient in order to cut budgets.

When the NPR got under way last spring, Gore made it clear he wanted to stay out of the budget fray. "I prefer not to focus on monetary savings, or the elimination of waste, fraud and abuse," he told Government Executive in May.

That approach wilted under the heat of negotiations on the budget reconciliation package last summer. As a critical Senate vote on the package neared in early August, Sen. Bob Kerrey, D-Neb., paid an 11th-hour visit to the White House and hinted that he might not be able to vote for it unless the Administration could guarantee added spending cuts. Clinton immediately touted the NPR as the key to further budget reductions. Estimates from White House officials on just how much it would save started rising almost daily, from around $ 10 billion when when Kerrey made his trip to $ 90 billion by the beginning of September. When the report finally came out, Gore's introduction highlighted $ 108 billion in potential savings from cutting programs and "reengineering" government.

Public administration experts say it's unreasonable to expect that much in savings from reinventing government. More like $ 10 billion over five years is reasonable, argues Donald Kettl, a professor of political science and public affairs at the University of Wisconsin. But to achieve even that amount would require agencies to make upfront investments that would cancel out many of the gains, he says.

In a critique of the performance review this summer, John Dilluio, a professor of politics and public affairs at Princeton University, argued that overhead expenses consume little of the federal budget. For example, he noted that while the government spends about 10 times more than it did in 1963, only a tiny fraction of that increase has come from pay raises and other benefits for federal employees. "In other words," Dilulio wrote, "the reason the government spends so much is that it does so much." Real cost savings come from cutting not just fat, but meat. "The crucial step in over hauling government is to decide what it should and shouldn't do -- and then to eliminate the programs and agencies that don't belong," wrote columnist Robert J. Samuelson last month. "These are political choices, not questions of management efficiency."

Samuelson recommended eliminating subsidies for farmers, artists, rural communities and local transit efforts, and shutting down the Small Business Administration and Amtrak. Total savings; about $ 20 billion a year. The NPR wasn't nearly so bold. It relies on such recommendations as eliminating politically popular federal highway demonstration projects and long-derided subsidies for wool, mohair and honey. Total program cuts: $ 28 billion over five years. And some of those reductions are actually fee increases. For example, a proposal to allow the Food and Drug Administration to collect user fees totaling $ 1.4 billion is classified as a spending cut.

The balance of the $ 108 billion in savings comes from unspecified efficiency improvements in procurement, personnel and other systems. Savings in those areas have historically been hard to come by and very difficult to quantify.

The Politics of Reinvention

Up until now, reinventing government has been largely an apolitical movement. Its principles of downsizing, focusing on quality service and decentralizing operations have been supported by both Democrats and Republicans.

Political issues, however, underlie much of federal mismanagement, and Gore has shown little interest in addressing them. The NPR report says nothing about one of the biggest problems facing career federal managers and executives today: About half of all political appointees stay in their jobs less than two years. On top of that, the layers of political management at agencies have increased dramatically in recent decades. The NPR's job cuts involve almost no reduction in political appointees.

During a Gore-led "Reinventing Government Summit" last June in Philadelphia, Thomas Mann of the Brookings Institution tried to argue that part of the problem in managing the government might be the political system itself. Federal agencies and programs, he noted, are the creatures of a Congress driven by a public that increasingly demands instant solutions to complex problems after scandals erupt.

Gore brought him up short. "I really disagree with that," he said. "It discounts the value of democracy."

Gore's attitude is reflected in the report. It acknowledges that Congress confuses agency missions by piling on policy objectives and overburdens managers with reporting requirements, line items and earmarks. But it makes no concrete proposals on how to curb Congress's impulse to try to run agencies from Capitol Hill.

Meanwhile, the micromanaging goes on. Even as Gore was putting the finishing touches on his review, a congressional committee was crafting appropriations legislation that would require the Bureau of Engraving and Printing to run three shifts a day, five days a week, regardless of the agency's workload.

There may be little Gore can do to change the behavior of Congress. But he hasn't really tried yet. It wasn't until late in the summer that NPR officials began to work in earnest with legislators on a vehicle to implement the NPR proposals. A bill to create a reform commission that would provide very limited fast-track consideration of the NPR recommendations passed the Senate Governmental Affairs Committee in early August, but looked to face opposition in the full Senate.

Of course, Clinton and Gore have at least three years to figure out how to get their reforms implemented. There is little doubt that they are committed to the task and are aware that they've only started the ball rolling. Osborne estimates that the NPR report represents only about 5 percent of the work that will be needed.

"You can't reinvent the federal government in six months, or even six years," says Kettl. "It will probably take closer to a generation."

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